Venetian questioning new LVCVA expansion financing

Representatives of the Venetian hotel-casino say the Las Vegas Convention and Visitors Authority's negotiated sale of bonds for an expansion project may be illegal.

In a series of faxed correspondences between the Venetian and the LVCVA, attorneys for the resort are seeking additional information on actions taken at the LVCVA board's Nov. 9 meeting.

At that meeting, the board voted to give LVCVA President Manny Cortez the authority to negotiate the sale of $150 million in revenue bonds to be priced by Morgan Stanley Dean Witter.

Under negotiated sale deals, rare in municipal bonds, terms such as interest rates are negotiated.

The vote at the Nov. 9 meeting was the second time the LVCVA had approved bonds for the 1.3 million-square-foot expansion of the Las Vegas Convention Center. After the first vote in June, the Venetian sued the LVCVA over whether the bonds were revenue bonds, as the LVCVA said, or general obligation bonds backed by revenues of Clark County.

The Venetian and owner Sheldon Adelson say the LVCVA finance plan represents unfair competition to Adelson's privately owned Sands Expo Center.

Morgan Stanley Dean Witter was the company that won the competitive bid following the June vote.

A District Court judge ruled in favor of the LVCVA last month. The Venetian said it would appeal the ruling.

The judge has not issued a final judgment, which must be noted in an entry of judgment by the LVCVA before the clock starts on the appeal process. The Venetian would then have 30 days from that notice of entry to make its appeal.

Meanwhile, Venetian officials have a new concern.

Correspondence between Venetian attorney Pete Gibson of Hale, Lane, Peek, Dennison, Howard & Anderson; and LVCVA contracted attorney Todd Bice of Schreck Morris have gotten progressively more heated as the Venetian seeks documents related to the planned negotiated sale and the LVCVA's strategy of selling bonds without a competitive bid.

The LVCVA says it can save $3.5 million with a negotiated sale; the Venetian wants to see the proof.

"The $150 million in bonds is a very serious, serious matter," Gibson said Thursday. "We're being as careful as we can so that we really understand and know what has happened with respect to this bond sale."

Gibson said the LVCVA is rapidly moving toward negotiating the sale of the bonds. That's why the Venetian wants to see the LVCVA documents as soon as possible.

LVCVA President Manny Cortez was in London on a business trip most of last week. He could not be reached for comment Friday on the current status of the bond sale.

In a letter faxed to Bice by Gibson Wednesday, the Venetian requests:

--Meeting notices, agendas, resolutions, meeting minutes, tape recordings, transcripts, staff memoranda and other documentation related to the LVCVA board's action on the negotiated sale.

--Documents relating to the planned sale itself.

--Documents relating to the LVCVA's attempt to comply with state laws in proceeding with the negotiated sale.

--Documents relating to the bid process of July.

--Reports, analyses and documents provided to or received from Morgan Stanley Dean Witter.

--Documents supporting the LVCVA's contention that it is exempted from selling bonds by competitive bid.

Luke Puschnig, legal counsel for the LVCVA, said the agency is doing the best it can to comply with the request.

"This is not easy," Puschnig said. "It's not like everything's in one file and we can just hand it over."

Pushnig said the meeting minutes have not been completed.

Gibson said Thursday litigation isn't imminent in the case, though his letters and one written by one of his partners made it clear that could occur if they don't get the information they want quickly.

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